Have Ailing Airlines Found a Cure?

Like an epidemic of corporate West Nile virus, the bankruptcy contagion has begun spreading again among the nation's air carriers. It has already stricken UAL's (OTC BB: UALAQ) United Airlines. Last month, Delta Air Lines (NYSE: DAL  ) reported a feeling of lethargy and malaise as well. Worst of all, unlike West Nile, it appears that exposure to bankruptcy once does not confer future immunity upon the patient.

Case in point: On Friday, a former victim of the bankruptcy plague (sick from 2002-2003) became the second patient to complain of bankruptcy-related symptoms in 2004. US Airways' (Nasdaq: UAIR  ) pilots union voiced its opinion that the No. 7 U.S. airline may have to file for bankruptcy as early as next month if it doesn't find a way to cut its costs before then. (Strangely, while the disease is the same at both airlines, the symptoms appear to be reversed -- at Delta, it was management threatening its pilots with the loss of their jobs and pensions if they didn't satisfy its demands for salary concessions. At US Airways, it is the pilots voicing the dread "B"-word -- perhaps it also works a vaccine?)

While the symptoms of bankruptcy vary from patient to patient -- in addition to the above infectees, Northwest (Nasdaq: NWAC  ) is said to be looking a little green around the gills -- managements across the board agree that one magic elixir can cure every case of the illness: wage concessions. I know what you're thinking -- what altruism! The airline managements want to forgo their salaries, bonuses, and stock options to save their airlines! Ha-ha. Silly Fool. With a few marquee name exceptions, management just wants wage concessions from the staff:

To be precise, US Airways says the cure to its ills requires an $800 million dosage, composed of two parts pilots' concessions, two parts mechanics', one part customer service's, and one part flight attendants'. Apparently, adding a salary cut by management would ruin the formula.

Ironically, four out of five physicians agree that the more patients who complain of bankruptcy symptoms and are successfully treated with wage concessions, the faster this disease will spread.

Fool contributor Rich Smith owns no shares in any company mentioned in this article.